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Auditor-General confirms flaws in Galana contract

Mercy Mwai @wangumerci

Auditor General Edward Ouko has confirmed flaws in the financing agreement signed between the government and Green Arava for the construction of 10,000-acre Galana/Kulalu Food Security Project.

In an audit report tabled in the National Assembly yesterday, Ouko revealed that Green Arava was single sourced and the contract terms provided for advance payments.

“Single sourcing favoured the contractor against competitive bidding, pricing, capacity and competence,” Ouko said in the report. He said advance payments and pegging production to acreage rather than harvest “sometimes led to under-performance”.

Food security

The project was initiated with the objective of ensuring food security following recommendations of a pre-investment and feasibility study conducted in 2013.

Construction of the 10,000-acre model farm in Tana River and Kilifi counties was awarded to Green Arava for Sh15 billion on August 20, 2014.

Works commenced on September 11, 2014 and was expected to be completed within 30 months — or by March 9, 2017. The government’s intention was gradual implementation of other phases to 400,000 acres but so far only 5,000 acres have been planted.

The project has been rocked by disagreements between Green Arava and the National Irrigation Board (NIB), the implementing agency, over delayed payments. In February, Green Arava abandoned the project and is yet to resume despite multiple promises to recommence work.

Although NIB has taken over the project, the State is considering terminating the contract. Last week Agriculture Cabinet secretary Mwangi Kiunjuri asked for a meeting on Tuesday between Green Arava and NIB, but the Israeli firm officials never showed up.

“There has been a disagreement between NIB and the contractor over various issues. As a ministry, we have been consulting with NIB and other stakeholders with a view to solving the dispute and ensure the Government aspirations of producing more food are achieved. Recently we formed a committee of various government agencies to look into the challenges facing the project,” said Kiunjuri.

In the audit report, the contract does not provide for transfer of knowledge of manning the infrastructure installed after the contractor exits the site and conflict of interest as the designing firm is associated with the contractor which could lead to poor designs.

He said the financing agreement is tied to the contractor, therefore all project funds can only be channeled through the contrator. “This gives the contractor an upper hand and leaves the employer (Government) at the mercy of the contractor.”

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